The Crookston Ways & Means Committee met on Monday night to review the 2022 preliminary budget and Tax Levy. The committee also heard a Small Business Development Center (SBDC) Presentation from Christine Anderson.
CHRISTINE ANDERSON
Christine Anderson of the Small Business Development Center of the Northwest Region gave the Council an update on the work done in 2020 and the current work being done in 2021. The SBDC provides free information, confidential counseling, and one-on-one support to start, build and grow businesses.
She currently is working out of the UMC Veden Center and used the opportunity to address the board on what she has been working on during COVID-19.
The Crookston Housing & Economic Development Authority has supported the SBDC in the past, and Anderson was asking the board if they would once again be willing to help for the upcoming year.
City Administrator Amy Finch discussed if the city will support the foundation again this year. “There are dollars currently in the budget that in years past the city allocates to CHEDA, and then CHEDA allocates them to the Small Business Development Center,” said Finch. “We are waiting to hear more information on exactly what they want from Crookston for 2022, and that information will come in fairly soon and we will make a decision moving forward.”
Once the information on how much the SBDC would want from the city comes in, the city will review it as a part of the 2022 budget and decide if they will send the SBDC funds for 2022.
OVERALL BUDGET REDUCTION
The second item on the agenda was the city’s preliminary budget. The city’s preliminary budget for 2022 will need to be approved at the next City Council meeting on September 27. At the last Ways & Means meeting, the committee agreed to set the preliminary Tax Levy at 10%, meaning the 2022 Tax Levy will not rise above 10% for the upcoming year.
The committee discussed possible solutions for lowering the levy and were giving a presentation from City Administrator Amy Finch, demonstrating what a 10% Tax Levy will look like. After discussion and reviewing the budget at a 10% Tax Levy, the committee agreed to officially set the preliminary Tax Levy at 10% for approval at the next City Council meeting Monday night, September 27.
Finch gave an overview of the most significant reductions that would be made to the budget with a Tax Levy at 10%, down from 12%. “Each department head and I met and discussed in-depth where we could make budget cuts,” said Finch. “We reduced our travel and training expense lines, we also had $20,000 in the budget for the transition between the community development department and CHEDA, and we reduced that to $10,000. We moved $35,000 that was allocated from the library, and that was moved to the municipal land and building fund, which is not a levy fund, and that gave a little bit of relief to our library fund.”
Other adjustments and changes included a slight reduction in material and building supplies, pool improvements, and highland complex improvement for new fencing.
Another option for helping with the cost reduction in the 2022 budget and potentially lowering the Tax Levy down from 10% was bringing back money originally sent over to CHEDA. Currently, CHEDA has just over $200,000 in its budget that has not been spent yet.
However, Council members were unsure if this would be the best decision, and Finch explained what challenges and issues could arise if the city goes this route. “One challenge is that this is a one-time fix,” said Finch. “So, if we do this, we need to understand that it won’t be available next year for us. Another challenge is that if we spend that money and a project comes along, we won’t have any funds to consider doing that project. So, we need to be intentional about how we utilize that money and how much of it we spend if we decide to pursue that option.”
Finch also discussed the timeline for the budget when it comes to decisions that will need to be made in the coming weeks. “Each year, the city has until September 30 to certify the preliminary budget with the county,” said Finch. “With the consensus that was made tonight, we will formally present City Council a 10% Tax Levy on Monday night, and if approved, we will submit that with the county. What this does, is that it makes it so we cannot go above 10% but can now work down from that number.”
The board will have until December to continue its discussions on how to reduce the levy. A goal for some Council members remains at getting the levy down to 7%. Almost every year, the levy does come down from what it’s initially set at, but according to Finch, 7% could reduce how the city serves the community effectively.
“I do believe there is a point where we have to talk about how reductions limit how we serve our community,” said Finch. “Some things are necessities in the budget, and with budgeting this year, we may have to have some real talks on how the more we cut could impact our community in a big way.”
Below are three different graphs. One showing how a 10% Tax Levy affects businesses and homeowners, another showing reductions that have been made to reduce the levy down to 10%, and a third showing the overall 2022 budget worksheet.
